By On the occasion of our 20th anniversary
By Gustavo Arellano
By R. Scott Moxley
By Alfonso Delgado
By Courtney Hamilton
By Joel Beers
By Peter Maguire
By Charles Lam
This article is the latest in an ongoing series by R. Scott Moxley which includes "God Bless America""Red, White, and Pissed Off""Patriot Games" in the Oct. 26 - Nov. 1 issue, and "With Friends Like These" in the the Nov. 9 - 15 issue. In the three months since a federal bankruptcy judge ruled that her husband used patriotism, religion and political connections to defraud elderly Republicans out of millions of dollars, Jo Ellen Allen's life appears unchanged. Several investors testified that Jo Ellen vouched for Eddie's honesty and his phony military and business credentials. But the Southern California Edison spokesperson and Republican Party official continues to attend political functions, where she fires up God-and-country conservatives. And she still shows up a few times a month at KOCE, where she offers news commentary on the Huntington Beach public TV station. You'd know her: she emerges from a Lincoln Town Car wearing a 1950s-style shampoo-set hairdo and an expensive knit suit. Her sparkling blue eyes are outmatched only by the American-flag lapel pin she invariably wears.
"I think Jo Ellen is in denial. She acts as if she's done nothing wrong," says Jon Illingworth, a 59-year-old retired Tustin resident who Eddie defrauded for $40,000. "Far from apologizing and trying to make amends, the Allens claim they are the victims. They've never taken any responsibility for all the people they have hurt."
But if Jo Ellen's public life is toothy smiles and Fallwellian political pronouncements, her private life is a Gothic nightmare. On Nov. 9, Washington Mutual Bank foreclosed on her $1 million home at 21 Carmel Bay in Corona del Mar, driving the Allens onto the street. According to court records, Jo Ellen stopped paying their mortgage, community-association dues and property taxes almost a year ago. At the same time, the Allens were in a nasty legal fight with the lawyer who was supposed to represent Eddie in his appeal of the bankruptcy judge's Sept. 6 decision.
The Allens' housing crisis dates back 10 years. In February 1992, they fled another Corona del Mar home, still owing their landlord $14,000 in rent. They settled in a posh Santa Ana mansion so that Jo Ellen could run for a state Assembly post there. Though there's no evidence they paid rent, that home has its own remarkable history: the Allens' landlord was Stephen Wagner, a Newport-Mesa school official arrested that same year on charges he bilked the district out of $4 million. He pleaded guilty, was convicted and died of AIDS in prison in 1995.
Jo Ellen lost the Assembly race and, in a move that suggests her relocation to Santa Ana was purely political, began the hunt for a new home—in the very Corona del Mar neighborhood the Allens had abandoned the year before. In 1993, she and Eddie settled on 21 Carmel Bay, a three-bedroom ranch-style house on a hill overlooking Newport Harbor and the Pacific. Its 1993 purchase price: $695,000. Money wasn't hard to come by: court records show that Eddie had just conned more than $580,000 out of Doris Lach, an elderly Florida woman. Nevertheless, the Allens persuaded William Thrash, the former owner, to finance their purchase.
Early on, the couple missed several house payments to Thrash. A retired four-star Marine Corps general, Thrash now lives in Hilton Head, South Carolina. And though his troubles with the Allens occurred almost a decade ago, he recalls them vividly. Three years after they bought the house, the couple began having trouble paying the mortgage. Thrash was forced to threaten foreclosure several times in 1996 before the Allens cobbled together a collection of loans from banks and friends to pay him off. "The worst day of my life was the day I met Eddie Allen," Thrash says.
Their troubles with Thrash would suggest a cash-flow problem in the Allen household. But court documents show the couple lived a lavish lifestyle, shopped at expensive Newport Beach boutiques, drove luxury cars and took frequent "business" trips. They dined often at the Balboa Bay Club, which Eddie once told a business associate he partially owned. He doesn't. Eddie's autobiographical stretchers didn't stop there: several investors say Eddie got their confidence—and their money—by deceitfully posing as an affluent Harvard-educated attorney, Wall Street financial genius, and key CIA spy who advised Republican presidents and had been tortured while a prisoner of war in Vietnam.
Eddie's cons produced a swelling—and litigious—army of enraged creditors. Surrounded on all sides, Eddie moved quickly to shelter the only asset he would admit to owning—the home at 21 Carmel Bay. To keep the house beyond the reach of his creditors, Eddie surrendered full title to Jo Ellen in February 1996; she immediately wrapped the house in a cumbersome series of mortgages that drained it of all equity. One year later, Eddie declared personal and corporate bankruptcies.
The Allens don't just have trouble with houses; they also have trouble with lawyers—especially, perhaps, their own.
A centerpiece of Eddie's bankruptcy trial was Eddie's claim that he had been a valuable Vietnam-era CIA agent. Eddie told prospective investors he had been captured by the Viet Cong, tortured and rescued thanks only to the personal intervention of Henry Kissinger or Major General Richard Secord, depending on which version Eddie told.